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Saturday, October 31, 2009

I am now proof reading the book, which should be out by Bloomsbury within the month - check back in for the URL for the Creative Commons download.

This has been the busiest NN month on record, with the US and Canadian rulings and the European Conciliation. You (i.e. the blog audience) is now 700 visitors a month and 1200 page views - which is double its previous level.

Thanks for reading and do comment on anything you find interesting or news I have missed. Adelante!

Wednesday, October 28, 2009

Sigh, the much-heralded 'self'-regulatory Code of Practice needs a bit more co- and a bit less self-

I was astonished to hear from Candian regulators that they thought this was a good model, though it had to be forced through over the near-dead bodies of fixed ISPs, mobile ISPs have ignored it, and they all routinely traffic shape and otherwise throttle.

Lord Mandelson has put back the date for'3 strikes' against supposed pirates to mid-2011 or later - where it started with the Digital Britain report back in June. So that's a problem for a new Tory government and an emasculated future Ofcom-lite.

Interesting suggestion for adoption in US of a co-regulatory scheme - how can you have audit and arbitration without government sanction - on net neutrality - now if only the industry had cooked this up before the NPRM. Will the growth of Ofcom's scheme prove a spur?

Its worth exploring the future of mobile a bit - which is Japan, led by Sacchio Semoto, who opened up long distance (KDDI) AND broadband E-access) in the 1990s, and in 2005 formed e-Mobile. It launched its HSPA network at 5Mbps in 2007, and in 2009 rolled out HSPA+ at 21Mbps. Its only in the major cities so far, but rolling out via dongles for laptops - so open access. The prices vary according to monthly bitcap.

The important element of this story is that the entrant aggressively persued open access, not walled gardens - like 3 in Europe but on steroids. That has forced DoCoMo and others to respond, with nationwide HSPA, and UQ Comms has entered the market with WiMAX at 40Mbps in cities.

That type of competition has really changed the original DoCoMo walled garden into super-fast open data.

Tuesday, October 27, 2009

Just back from a fascinating session at IIC, with a preview by the CRTC chair on their net neutrality ruling. A reminder, this is an incumbent and regulator get-together generally, so it was interesting to see three challengers to telecoms incumbents on the panel with Chris Boam (Verizon), the fairest-minded of network operators. They were Chris Libertelli of Skype, Michael Geist of UOttawa, and the CBC rep, who just spent 16 years with Sky in the UK and revealed his independence by praising the dread Ofcom (which Sky has trash-talked for 6 months!).

So, to highlights, and lets begin with the Canadian ruling in detail. CRTC has essentially challenged both wired and wireless operators to cause a consumer complaint on blocking apps. The wireless part is somewhat new. It will require a complaint to turn this general ruling into individual case-bound rules. Geist pointed out that we could get either too many complaints (every time your connection times out you complain, as when Videotron resets my connection at noon each day), or too few, as consumers are not sufficiently empowered to sort through evidence. I should have thought CIPPIC or another consumer friend will bring a case - perhaps against wireless - soon. Certainly the fixed ops' questions revealed their continued intransigence (Telus wierdly thinks its new 3.5G network will somehow be quicker than Japan's 4G e-mobile!). So expect fireworks this winter.

The panellists all seemed to agree that case-by-case decisions by regulators will outpace any legislative approach - and that co-regulation will be faster still (collated reporting and notice on new apps, so that regulators can issue 30-day cease-and-desist). Michael Geist asked whether the throttling practices revealed - Bell's 4.30pm-2am 'peaktime' for instance - could be maintained in the face of the notice.

When it came to praising solutions adopted, some bizarrely praised Ofcom, which is case so far unproven, and no-one chose to mention the Norwegian working solution. Ah well, c'est la vie - and net neutrality is only a part of fast broadband, after all.

1. 'adopted a new test to determine reasonable traffic management practices. Where a consumer complains, ISPs will be required to describe their practices, demonstrate their necessity, and establish that they discriminate as little as possible. The CRTC added that targeting specific applications or protocols may warrant investigation and slowing down time-sensitive traffic likely violates current Canadian law. '

2. 'rejected arguments that the market would ensure ISPs provide adequate disclosure on how they manage their networks. Instead, it mandated full disclosure of traffic management practices, including information on when they occur, which applications are affected, and their impact on Internet speeds.'3. 'banned the use of personal information obtained through deep-packet inspection for anything other than traffic management purposes. By also prohibiting the disclosure of such information, the commission ensured that inspecting user traffic cannot be parlayed into marketing opportunities.'

He then offers three suggestions for improvement without needing new legislation:'Critics of the CRTC approach rightly note that the onus falls to consumers to compile evidence of traffic management practices that run afoul of the commission's test and file complaints. [Clement] can go several steps further by asking the CRTC to conduct regular compliance audits of ISP traffic management practices and by providing financial support to consumer groups who wish to conduct their own investigations. Clement could incorporate net neutrality requirements directly into the [analogue TV refarmed spectrum] bidding process, effectively mandating neutrality into new wireless services. Finally, Clement should acknowledge that net neutrality concerns are largely a function of an uncompetitive marketplace that allows ISPs to leverage their positions without fear of losing customers.'

Fix that and things might improve - though I have long maintained no ISP has incentives to allow free P2P hosting.

The FCC has created a new class of 'managed or specialized services' that may allow higher-speed dedicated video/medical services/Uncle Tom Cobbleigh and all to be designated, while ensuring public Internet traffic will largely be protected from discrimination with 'bright line' prohibition on discrimination.

any measures may only be adopted as a result of a prior, fair and impartial procedure ensuring inter alia that the principle of presumption of innocence and the right to be heard of the person or persons concerned be fully respected. Furthermore, the right to an effective and timely judicial review shall be guaranteed.

I fear the bill would spur a food fight among ISPs, each of whom could complain about what the others were doing. Such a battle would raise the probability that those ISPs with the most effective lobbying shops will prevail over those with the most attractive offerings for consumers, if and when the two diverge.

Why use the phrase “reasonable network management” to describe this exacting standard? I think the most likely answer is simply that many participants in the net neutrality debate use the phrase as a shorthand term for whatever should be allowed — so that “reasonable” turns out to mean “permitted.”

Morgan Stanley uber-analyst has a very nice slide set - particularly illuminating is the death of Euro-walled gardens for mobile, and the 5000% increase in AT&T data traffic over 3 years (sl.57) - iPhone adoption drove that. Also note installed base of WiFi devices crossing the billion mark, twice 3G use. Also note that she appears to agree that aggressive roaming regulation and net neutrality will drive the consumer mobile Internet - as opposed to walled gardens.

The next meeting is now set for 4 November and agreement is needed by the end of the year - so expect the law to neatly be a 2010 date. The Conciliation Committee is squabbling over how much to push on Amendment 138/46 - but note that right-wingers won the 2009 elections so socialist-green-Pirate complaints will meet largely deaf ears. The chief negotiator is a right-wing Spaniard, so Telefonica territory.

That date has a nice symmetry with i2010, when we can celebrate the EU being the most competitive knowledge-driven economy in the world with highest broadband penetration, lowest unemployment and highest economic and civic participation.

Wednesday, October 21, 2009

Its been quite a month, with declarations by the FCC Chair and European Commissioner, and a long-awaited ruling handed down in Canada, together with a sensible APCOMMS report from the UK Parliament. What do all these declarations and decisions mean?

Well, though some advocates might wish for more, it means that regulators are convinced that there is a net neutrality problem, and that ISPs must begin to justify their traffic management practices to both consumers via notice and to regulators, who will investigate and report on ISP practices.

So to quote the least neutral Englishman ever, this is not the end, not even the beginning of the end, but it is the end of the beginning....

"This has really not changed anything" said Tom Copeland, chair of the Canadian Association of Internet Providers, many of whose members buy Internet connectivity from phone or cable companies. The association complained to the CRTC last year after Bell Canada began managing traffic during peak hours to these wholesale customers, which prompted protests from subscribers that their Internet service was sometimes slow.

Copeland said the "biggest, most glaring omission" from the ruling is the lack of restraints on the time of day or how long suppliers like phone or cable companies can manipulate traffic. "So we could continue to see traffic management every day of the year," he said. "We're still not addressing the cause of the problem," he added: "Either weak points in the network, or abuse by users." Most casual users of peer-to-peer applications -- the biggest offending programs in the eyes of providers - aren't the problem, he said.However, they are being treated as if they are.

The CRTC today released its new guidelines on breaching net neutrality, based on its July hearings. From Michael Geist, the very sensible comment that "While this decision will undoubtedly leave many disappointed, a full prohibition on throttling was never in the cards. Many consumer groups and net neutrality advocates got some of what they asked for - a test that looks a lot like what they recommended, an acknowledgement of the problems with application-specific measures, new disclosure requirements, new privacy safeguards, and agreement that throttling can violate the law in certain circumstances. That isn't bad as an overall framework.The big question is how to enforce these rules. The larger ISPs may well view the decision as a green light to continue doing what they are doing with a bit more communications. Indeed, by placing the onus squarely on consumers, the CRTC has virtually guaranteed continued throttling and a steady stream of cases."

Here's his summary of the conditions:

1. A new framework for considering traffic management. Consumers can complain about traffic management practices or the Commission can bring an action on their own. Where there is a credible complaint, the ISP will be required to:

Describe the ITMP being employed, as well as the need for it and its purpose and effect, and identify whether or not the ITMP results in discrimination or preference.

If there is any degree of discrimination or preference:

demonstrate that the ITMP is designed to address the need and achieve the purpose and effect in question, and nothing else;

establish that the ITMP results in discrimination or preference as little as reasonably possible;

demonstrate that any harm to a secondary ISP, end-user, or any other person is as little as reasonably possible; and

explain why, in the case of a technical ITMP, network investment or economic approaches alone would not reasonably address the need and effectively achieve the same purpose as the ITMP.

2. There are two key additional considerations. First, traffic management that degrades or prefers one application over another may warrant investigation under section 27(2) of the Act. Second, economic traffic management practices (ie. bit caps) are generally viewed as ok.

3. The Commission has stepped into the throttling issue. It has ruled that for time-sensitive Internet traffic (ie. real-time audio or video), where the throttling creates noticeable degredation, this "amounts to controlling the content and influencing the meaning and purpose of the telecommunications in question." The Commission will require prior approval for such activities. Even for non-sensitive traffic, the CRTC has ruled that it is possible to slow down to an extent that it amounts to blocking or controlling the content, therefore requiring prior approval.

4. The Commission has mandated new disclosure requirements. It is requiring ISPs to disclose their traffic management practices to customers, including:

why there are being introduced

who is affected

when it will occur

what Internet traffic is subject to the traffic management

how it will affect an Internet user's experience, including specific impact on speed

5. New privacy requirementsThe Commission has established new privacy requirements on the use of information obtained from deep-packet inspection. It now mandates ISPs "not to use for other purposes personal information collected for the purposes of traffic management and not to disclose such information."

In addition to the retail side of the equation, the decision also addresses wholesale (ie. ISP to ISP). In a nutshell, where incumbents treat independents in the same manner as their retail customers, the same complaints-based approach applies. Where the approach is more restrictive, prior approval is required (this latter point was the inspiration that led to the initial hearings - Bell Canada choked all its retail customers, which was traffic management but not discrimination).

Tuesday, October 20, 2009

Interesting analysis by Monica Horten of the Commission's new proposed Declaration on Net Neutrality - which is weak as she says, but as much as the Council of Ministers (i.e. national regulators) are willing to countenance, basically reiterating its net neutrality 'lite' approach that I have written about elsewhere:

The Commission attaches high importance to preserving the open and neutral character of the Internet, taking full account of the will of the co-legislators now to enshrine net neutrality as a policy objective and regulatory principle to be promoted by national regulatory authorities, alongside the strengthening of related transparency requirements and the creation of safeguard powers for national regulatory authorities to prevent the degradation of services and the hindering or slowing down of traffic over public networks. The Commission will monitor closely the implementation of these provisions in the Member States, introducing a particular focus on how the "net freedoms" of European citizens are being safeguarded in its annual Progress Report to the European Parliament and the Council. In the meantime, the Commission will monitor the impact of market and technological developments on "net freedoms" reporting to the European Parliament and Council before [the end of 2010/ the end of October 2010]on whether additional guidance is required, and will invoke its existing competition law powers to deal with any anti-competitive practices that may emerge."

We appreciate the opportunity to send you this letter. As individuals who have worked on the Internet and its predecessors continuously beginning in the late 1960s, we are very concerned that access to the Internet be both open and robust. We are very pleased by your recent proposal to initiate a proceeding for the consideration of safeguards to that end.

In particular, we believe that your network neutrality proposal's key principles of "nondiscrimination" and "transparency" are necessary components of a pro-innovation public policy agenda for this nation.

This initiative is both timely and necessary, and we look forward to a data-driven, on-the-record proceeding to consider all of the various options. We understand that your proposal, while not even yet part of a public proceeding, already is meeting with strong and vocal resistance from some of the organizations that the American public depends upon for broadband access to the Internet. As you know, the debate on this topic has been lengthy, and many parties opposing the concept have systematically mischaracterized the views of those who endorse and support your position.

We believe that the existing Internet access landscape in the U.S. provides inadequate choices to discipline the market through facilities-based competition alone. Your network neutrality proposals will help protect U.S. Internet users' choices for and freedom to access all available Internet services, worldwide, while still providing for responsible network operation and management practices, including appropriate privacy-preserving protections against denial of service and other attacks.

One persistent myth is that "network neutrality" somehow requires that all packets be treated identically, that no prioritization or quality of service is permitted under such a framework, and that network neutrality would forbid charging users higher fees for faster speed circuits. To the contrary, we believe such features are permitted within a "network neutral" framework, so long they are not applied in an anti-competitive fashion.

We believe that the vast numbers of innovative Internet applications over the last decade are a direct consequence of an open and freely accessible Internet. Many now-successful companies have deployed their services on the Internet without the need to negotiate special arrangements with Internet Service Providers, and it's crucial that future innovators have the same opportunity. We are advocates for "permissionless innovation" that does not impede entrepreneurial enterprise. We commend your initiative to protect and maintain the Internet's unique openness, and support the FCC process for considering the adoption of your proposed nondiscrimination and transparency principles.

Thursday, October 15, 2009

The Benkler team's study is here, and I'm going to digest it this evening and over the weekend. As it links pro-unbundling and regulatory commitment to market entry to lower broadband prices, inevitably it hammers Australia, Canada, the US - all in thrall to deregulatory free market policies and all of whom have failed to entice the Long Tail of poorer consumers to cheap bitstream offerings. I'll watch particularly closely to see if it critiques Germany and Spain in contrast to UK-Italy-France-Netherlands-Scandies.

Incidentally its bogus to claim the difference is that Canada, Australia and the US all have low population concentrations. Australia and Canada are amongst the most urbanised 'real' countries - leave out Hong Kong, Taiwan and Singapore - a high proportion huddle in cities along the coasts or Great Lakes-St Lawrence Rivers (and US border westwards). Iceland has low density and high concentration too. France has a more disparate population - and the fact is, broadband over copper can reach 96-8% of pretty much any developed country, dispersal is not relevant to the larger market picture, however important to that last 2-4%.

"Following the Government’s publication of the ‘Digital Britain’ report in June, it asked Ofcom to form and chair the Consortium which, at today’s launch, has over fifty members.

Ofcom Chairman Colette Bowe

They will contribute expertise and communications channels to promote Digital Participation. Members include BT, the BBC, Channel 4 and BSkyB and membership is open to any organisation that can use its communication channels to inform and motivate people to become engaged with digital technologies or offer outreach to people who need support."

[Deep breath]

Hmm, sounds like hot air to you?

OK, well its a public-private consortium to encourage people to go online, launched by Minister Stephen Timms, moneybags part-timer Colette Bowe at Ofcom and the rather over-rated ex-business person "Champion for Digital Inclusion" Martha Lane-Fox, junior co-founder of Lastminute.com which a great young technology strategist called Brent Hoberman pushed along.

2012-ish is analogue switch-off date and USO deadline year, and at least the government has got a grip on that with 'Race 2012'. Why not call the consortium 'Digital 2012' with a real sense of urgency and simplicity, as any business should do? How does it measure success, failure and an exit strategy? Why not try to get all Britons able to watch all the Olympics (or none!) by that summer? Or is it because mobile and DSL broadband will be so slow in some regions that Usain Bolt will appear to take a minute to run 100metres?

Tuesday, October 13, 2009

I may be a tired old Euro-consultant who knows the incumbents almost always win both in Brussels and Washington, but I do enjoy reading the impassioned attacks on the Conciliation process and Articles 20-21 USD by Monica Horten and Mike Kiely's excellent blog. They're not always the most balanced but they offer insights that lobbyists will find very difficult to swallow.

For more of similar approaches to net neutrality, see the always provocative Net Neutrality Squad archive - thanks to Jean Paul for pointing me at it.

Monday, October 12, 2009

David Isenberg has long argued that carriers just don't like the Internet - they want voice calls, texts, private lines and so on. He's right, of course - "dumb pipes" commoditize the networks - which is good for the world and bad for telcos.

The Nobel Committee has finally recognized Oliver Williamson's ground-breaking work on corporations, and their role in 'conflict resolution' in markets - extraordinarily important work in net neutrality - how else can you explain the games regulators play with the likes of Verizon, Vodafone or BT?

These markets are so flawed that you need his insights to make sense of the 'competitive' landscape (sic). That doesn't mean I always agree with him, notably his 'efficiency defence' in antitrust mergers.

Paul Krugman's always excellent blog explains in a bit more economically literate terms...(yes he's arrogant but he has good reason...)

Saturday, October 10, 2009

Today's Internet-only dead rubber World Cup qualifier will be a good test of our current broadband capacity, though I doubt the million streams that are predicted. Will ISPs have the nerve to degrade those paying for the game, or will they find interesting ways to avoid congestion?

"Perform admitted this week that the most simultaneous live viewers it has served is 50,000 for a Serie A match last season. Even the most-watched live sporting event on the web – Andy Murray's Wimbledon semi-final on the BBC website – was only seen by 230,000 people over a four-hour period."

For years - and I was speaking on content regulation at UMTS 2001 just after 9/11 - operators have been banging on about how mobile data (not SMS, much confusion in revenues caused by mixing the two) will transform networks and revenues. Now, as voice revenues appear to have peaked, and at least in the US, operators are rolling out real 3G, they sound surprised that users are maxing out their base stations.

Paul Jacobs, a very nice man who set up and runs Qualcomm, has been at CTIA and explained the need for much thicker arrays of base stations. That's not exactly news to anyone. What is news is that the FCC is taking mobiles to task for not anticipating that users would want an Internet experience instead of, you know, walled gardens and ringtones and high added-value stuff.

So what we need is, yes, more spectrum, but also readily deployable broadband solutions - which means WiMax and WiFi (see Charlie Dunstone's comments below) today, not jam (in the shape of LTE) tomorrow. Its a no-brainer that the industry will drag its feet and regulators will hum and haw about market-oriented tech-neutral spectrum auctions for the next 5-10 years.

Mobile broadband and net neutrality - I predict the longest-running show in town.

Ofcom's annual comms research shows something similar in terms of both fixed and mobile broadband increasing. 76% of users in a recent survey are not surprisingly unimpressed with the speeds they can achieve.

El Dunstone states:

"We get a sense that the mobile broadband thing has peaked. We are seeing some of those people begin to realise that the bandwidth you get on mobile is so much less than you get on a fixed line. Mobile broadband is increasingly a supplementary rather than a substitutional thing, and an increasing proportion of Carphone sales are of pre-pay dongles."

As regular readers know, I am no net neutrality absolutist or zealot, and have all along said my aim was to find a Middle Way - which means finding minimal rules that recalcitrant NRAs and the EC will have to enforce. Heaven can wait!

La Quadrature suggests the following way forward, which frankly I do not believe can or will occur, at the present stage of legislator and regulator ignorance of the issue:

'The public interest agenda in telecoms regulation is to codify clear limits for these practices for the protection of network neutrality. The provisions of the Telecoms Package as they stand suggest otherwise: they can be read as authorizing operators to abandon network neutrality for the sake of business models or the protection of private interests. These provisions must be amended or they must be placed under the umbrella of an overarching principle that clarifies that they can not lead to any form of network discrimination against contents, sources, destinations, media, applications, services or protocols running over the Internet Protocol.

As the conciliation committee negotiates the final text of the Telecoms package directives, European lawmakers must protect the value of the Internet for enhanced citizenship and more innovative markets :by getting rid of the anti-Net neutrality phrasing of Article 20 and 21 of the Universal Service Directive and by amending the Framework Directive, to clearly make Net neutrality a fundamental regulatory principle in the European telecommunications market.'

Wednesday, October 07, 2009

'there are many rea sons for being very vigilant with regard to new threats to net neutrality, as they can arise in the course of market and technology developments.The blocking or discrimination of Voice over IP services by mobile operators in several EU countries is just one example for this.

This is why the reformed Telecoms Package, proposed by the Commission in November 2007 and currently awaiting final agreement of the European Parliament and the Council,will further strengthencompetitive and market forces and transparency for consumers on the EU's telecoms markets and provide additional safeguards against anti-competitive behaviour –and this beyond the competition law instruments already available under Articles 81 and 82.

National telecoms regulatory authorities will in particular be required to promote 'the ability of end users to access and distribute information or run applications and services of their choice'. This will contribute to strengthen the "neutral character" of the net in Europe.

Where competitive forces alone are not enough to safeguard the openness of the Internet, national regulators will be able, under the reformed EU telecoms rules, to intervene in the market by settingminimum quality of service requirements for network transmission services(Article 22§3 of the Universal Service Directive). This will be supported bynew transparency requirementsvis-à-vis consumers (Articles 21 and 22 of the USD).

As regards instances ofblocking of VoIP applications on mobile broadbandnetworks, the second EU Roaming Regulation, which entered into force on 1 July, stresses that there should be no obstacles to the emergence of applications or technologies which can be a substitute for, or alternative to, roaming services, such as WiFi, VoIP and Instant Messaging services.

These reforms in favour of net neutrality are therefore a very important, (and often underestimated) achievement of the telecoms reform, and many European Parliamentarians, but also many Ministers deserve the credit for having strengthened the corresponding wording in the package during the legislative process.'

But here's the clincher: shje's going to give these proposals teeth (her emphases):

'I would like Europe to make good use of these new tools for enhancing net neutrality.I have myself already indicated that I would be prepared to act on this basis in case of continued blocking of Voice over IP services by certain mobile operators.

I would in addition like to have, in 2010, a broad debate about how the Commission could best use these new instruments in the interest of an open internet and of internet users.

The new telecoms package is in many instances a quite robust answer to such new threats to net neutrality. However, I also know that technology and regulation will evolve further in the years to come.And I plan to be Europe's first line of defence whenever it comes to real threats to net neutrality.'

'Apple and AT&T had a secret agreement to ban apps that would let iPhone users make phone calls using the wireless data connection, a fact that was revealed this summer when the FCC asked the duo to explain why Google’s innovative Voice app was rejected for the iPhone store. So for instance, Skype, the world’s most popular phone service, had to cripple its application so that it would only work when an iPhone was using Wi-Fi... which led the FCC to investigate if AT&T and Apple were colluding to prevent competition.In a bit of hairsplitting, AT&T has long maintained it doesn’t block Skype — which has uncrippled apps that run on other phones the company sells. Instead, it’s just had Apple block the application.'

Is it the network or the device stopping you getting the application you want? Ah, decisions, decisions...

Thursday, October 01, 2009

An Oxford (when did Said become broadband experts?!)-Cisco study of 24m users shows Britain 31st in broadband out of 66 countries, with 0.5Mbps upload speeds. If you account for most people having midband, that puts us 25th. Expect that to be maintained as BT shadows Virgin's DOCSIS3.0 rollout with its VDSL over the next 2-3 years.